SUNS  4250 Friday 10 July 1998

Jamaica: Fight for Control of Internet Market

Kingston, Jul 8 (IPS/Sam Pragg) -- A dispute between the British-owned telecommunications giant, Cable and Wireless and a small Internet provider, InfoChannel, is threatening to railroad an industry which has grown by leaps and bounds over the last two years.

"We are estimating the total market size to be between 35,000 and 40,000," says Owen Birthwright, Product Manager at Cable and Wireless (C&W). " I would say it has almost doubled since last year."

Since the Internet became a household name in Jamaica there has been quite a demand for the service. The first demonstration of the Internet was given in 1994 by the University of the West Indies.

Birthwright feels that at the present rate of growth, by the turn of the century, there will be more than 100,000 users in this Caribbean island.

"The Internet is being seen as a new frontier, both in terms of information delivery and a way of marketing oneself, as well as a way of adding customer service and support to your own customers," says Birthwright.

With an Internet presence, companies can consider themselves open around the clock, he adds.

But it is the growth in the industry and the rush to cash in on profits which observers say is at the root of this latest round of dispute.
Cable and Wireless which has a monopoly on telephone and communication services under a licence granted to them by the government, has accused InfoChannel, the second largest of about nine providers in the island of trespassing on its domain.

C & W has charged that InfoChannel has acquired, and illegally connected an earth station -- Very Small Aperture Technology (V-SAT) satellite system -- to its telephone network in violation of C & W's licence.

C & W has also accused InfoChannel of using the satellite system to complete international calls illegally rather than for its intended use of transmitting data. This, the company says, constitutes a clear breach of C & W's exclusive rights over domestic and international voice transfer.

The matter is now before the courts.

And Minister of Technology, Phillip Paulwell has ordered the Office of Utilities Regulation (OUR) to begin an immediate investigation into whether the privileges granted to C & W under its licence have been breached.

But this is not the first time that Cable and Wireless and InfoChannel have gone before the courts. In 1996 InfoChannel took the matter of the unfair advantage afforded the communications giant given its monopoly on the service to the courts.

One of the problems, charges InfoChannel, is that because of its privileged position, C & W is able to provide Internet service at a cheaper rate than its competitors. For most of the small companies the usage fee is two dollars per hour. C & W, on the other hand, has a charge of 2.20 dollars for the first 10 hours of usage, thereafter, users attract a fee of 1.70 dollars per hour.

In addition, C & W installs the telephone lines. When a customer goes in to discuss the installation of telephone service it provides immediate opportunity for the company to offer Internet service at the same time, the private providers contend.

The Fair Trading Commission, the government department set up to ensure equitable trading practices agreed with InfoChannel's contention that Cable and Wireless' operation could constitute an unfair practice and called on the company to take a less proactive role in terms of the selling of Internet services.

InfoChannel was dissatisfied with the ruling and took the matter to the Supreme Court, but the case was dismissed.

Since then there is no evidence that the communications giant has been any less aggressive in its marketing of Internet services. Some 50 percent of Internet users subscribe to C & W.

C & W's monopoly on telephone services is a sore point not only with other Internet providers, but also with ordinary Jamaicans.

"Cable and Wireless has used (its) might to lock down InfoChannel," says lawyer, Harold Brady.

"It is criminal what Cable and Wireless (is) doing. They just want to hog the whole show. They are going to set us back years when other countries don't have the millstone of this English company around their necks," says businesswoman, Grace Taylor.

Others blame an ambiguous telecommunication policy for the problems now facing the Internet industry.

"The dangers of not having a clear policy on interconnections to the Cable and Wireless network and the absence of modern telecommunications legislation with the appropriate regulatory authority is now brought into sharp focus," says a statement from the Jamaica Computer Society.

"It (the dispute) presses home the need to have an unambiguous policy on telephones and telecommunications so law-abiding businesses can take part in the globalised industry that telecommunications is," adds information technology business consultant, Jens Winton.